What Makes Micro Lending the Hottest New Trend in Small Business Financing

Micro Lending Is Making Strides in Micro Business & Banking

Real estate experiences have been unreliable and the stock market is highly erratic. How about investing in individuals and small businesses that give you assured returns? Many micro lending sites are doing really good and getting fat returns for investors. While these sites operate on different models, the average return rate has been much better as compared to the banks and the stock market. Micro lending has brought about a major shift in conventional lending and borrowing practices. Micro loans vary from $100 to $1500 and are available to the needy and impoverished individuals who do not have easy access to traditional lending institutes.

Micro lending has opened up new avenues for investors and created easy access to finance for small-scale ventures. This concept has helped a lot of people turn their dreams into a reality. While certain micro-lending sites offer fast and easy returns on your investments, others ensure that your loan is regularly repaid in dollars and some are simply for the do-gooders. With micro lending, you can always be sure that your money is going for a good cause. Whether you are interested in donating, lending, or earning, here are four credible websites that will make your money useful:

Kiva.com - Designed for the do-gooders

This is a nonprofit micro lending website where you can make a donation to anyone across the world. You will receive the amount you donate as soon as the as the micro-financer is repaid. Donations can be as small as $25 and are disbursed by the micro-finance bank. The money you receive can be withdrawn, recycled to fund another loan, or donated to Kiva for running the operations.

Microplace.com – For those who wish to make their money count

This micro-lending site will earn you 2-3% on your investments. The investment can be as small as $20 to any project that you find meaningful. Your money along with that of other investors goes to a micro-financing bank from where it is disbursed to the project you choose. Microplace.com will make sure that every single penny you give goes to the project of your choice. You not only earn interest on your investment but also get the opportunity to help a struggling entrepreneur become successful. When your investment matures, you also have the option of rolling it over to another loan or withdrawing your original stake.

Sponsormydegree.com – Because investing in knowledge gives the best returns

Sponsormydegree.com is a website where ambitious American students are seeking financial help to get through college. Here you can find student profiles that need help for paying their student loans. The donation you make goes directly to support their education. Education expenses are increasing with every passing day and this has left many deserving students struggling for opportunities. Micro lending brings you an opportunity to invest a small amount of money that can make a big difference to a good student.

Kickstarter.com – Because creative endeavors can change the world

Kickstarter.com generates funds for the creative minds. This website is for talented musicians, artists, writers, and innovative individuals who need funds for their interesting concepts. You can kickstart their career by funding their creative endeavors. If you are a patron of the arts, kickstarter.com brings you the opportunity to reach out to artists who are unable to realize their dreams due to financial constraints. However, Kickstarter has a catch – it is an all-or-nothing micro lending site. You fund a specific amount for a certain timeframe, but if the time runs out and the project fails to reach the goal, the money does not move. If you are comfortable taking risks on creative talent, kickstarter.com gives you easy access to promising talent that needs funding.

Micro lending is a way of improving lives and earning returns. These websites can actually make your small money count if you are looking for ways to donate or invest.

Key Takeaways

401(k) investors and retirement account holders are also turning to micro lending to boost their savings. A growing number of individuals are using their 401(k) funds and IRAs to engage in micro lending transactions to improve their financial portfolio. Americans have realized that the stock market may crash and mutual funds may provide dismal returns, but micro lending is a lucrative approach to earning higher returns. The IRS allows investors to engage in micro lending practices using their retirement funds. The major benefit of using the retirement reserve for micro lending is that all the returns remain tax-deferred until distribution. Tap money from your IRA or 401(k) plan and start funding small businesses for tax-advantaged growth. Diversifying your investments across different micro loans will eliminate the risks involved in lending and maximize the overall returns. Stay away from stock market risks and grow your money with micro lending.